Burford Capital Ltd said Monday it has raised a new $360 million private investment fund, the Burford Advantage Master Fund LP.

The litigation financing provider said the Advantage Fund will look to invest in ‘lower risk, lower return pre-settlement litigation’. Burford said the fund will target returns between 12% to 20% internal rate of return.

‘The Advantage Fund fills the gap between the Burford Alternative Income Fund, which focuses on lower return post-settlement investments, and Burford’s core business,’ it added.

‘The Advantage Fund has a structure that rewards Burford more than traditional fund models for producing good performance: the fund does not have a traditional management and performance fee structure, but instead provides the first 10% of annual simple returns to the fund investors while Burford retains any excess return.’

Burford said if the fund outperforms its own models to produce ‘super-normal’ returns, then a ‘level of sharing with fund investors would kick in.’

It said institutional investors have committed $300 million, while Burford itself has chipped in $60 million

Chief Executive Christopher Bogart said: ‘Burford is still scratching the surface of the legal finance market. As we continue to respond to our clients’ needs, we have found unmet demand for products in the middle range where litigation risk remains but where the risk is anticipated to be lower for structural or other reasons.

‘In response to this demand, we have created the Advantage Fund to match client demand with institutional investors seeking exposure to the uncorrelated cash flows of legal finance at a lower risk of loss with commensurate returns.’

Shares in Burford were 1.1% higher in London on Monday mid-morning at 747.50 pence each.

Burford will release its annual results on Tuesday.

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